RoEs for the company have declined almost 800 bps in past 3 years and 500 bps in past 4 years. High opex intensive business (38% avg cost-income), elevated credit costs (3%+ past 2 years) have restricted RoEs to 12%. Against this backdrop, post-IPO valuations (30x+ P/E and 2.9x P/B FY18, 2.6X FY19E) appear expensive and believe stepping up return profile is the key. Any improvement in credit costs and NIMs being retained at 10%+ levels should prove as key catalysts. While, we recommend Subscribe for LONG TERM, do not expect any short term gains.

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